Blue Jackets lose $25 million, NHL source says

Wednesday

May 11, 2011 at 12:01 AMMay 11, 2011 at 9:04 AM

Rising salaries for players, a sharp decline in attendance and lingering issues with their Nationwide Arena lease have the Blue Jackets projecting losses of approximately $25 million for the 2010-11 season, an NHL source told The Dispatch yesterday.

Rising salaries for players, a sharp decline in attendance and lingering issues with their Nationwide Arena lease have the Blue Jackets projecting losses of approximately $25 million for the 2010-11 season, an NHL source told The Dispatch yesterday.

The club's financial distress has been known for two years, but this season's projected losses - despite $12 million to $13 million in revenue sharing expected from the NHL this summer - represent a staggering increase. The Jackets lost roughly $14 million in each of the previous two seasons.

The deeper losses come at a time when two NHL franchises - in Phoenix and Atlanta - seem on the verge of relocation. It's possible one of those franchises could move to Winnipeg, Manitoba, before next season.

The NHL source said Columbus shouldn't be "part of that conversation with Atlanta and Phoenix yet. But they need a solution, and quick."

Blue Jackets President Mike Priest would not comment on the team's future in Columbus except to say: "(Majority owner) John P. McConnell is committed to winning and building the best franchise, and he's committed to finding a resolution."

The Blue Jackets finished their 10th NHL season early last month, missing the playoffs for the second straight season and ninth time altogether.

It was an even worse season off the ice, with four main factors contributing to the huge losses.

• Player payroll: The Blue Jackets spent roughly $52.4million on players' salaries this season, a franchise high and an increase of approximately $4.5 million from 2009-10.

• Attendance: The Jackets averaged 13,350 fans in Nationwide Arena this season, an average of 2,067 per game fewer than in 2009-10 and by far a franchise low. Based on average ticket sales, that's a $4.1 million loss from previous seasons. Fewer fans mean less money from concessions and merchandise sales, and many of the seats left unfilled were the most expensive. That $4.1 million figure could be much higher.

• Less revenue sharing: Because the Blue Jackets didn't average 14,000 fans per game and didn't match the NHL's revenue growth rate, they will lose 25 percent of their revenue-sharing check from the NHL. It would have been $16 million, perhaps more. Now they anticipate $12 million to $13 million.

• Arena lease: The Blue Jackets have been trying for at least two years to find a solution to a lease they say is out of line with others in pro sports. The Blue Jackets do not get parking revenue, naming rights revenue or some luxury box revenue per their agreement with Nationwide. They claim losses of $12 million per season because of these shortcomings.

Priest has led the search for a lease remedy but said there has been little movement in recent months. The possibility of tax money coming from a proposed casino on the West Side is being stalled by litigation.

Despite the losses, Priest said general manager Scott Howson is under no orders to cut payroll, an NHL club's highest expenditure.

The Blue Jackets have $38million committed in player salaries for next season but have several free agents without contracts, players whose spots on the roster will need to be filled. The NHL salary floor likely will be in the neighborhood of $46.5 million next season, but the Blue Jackets likely will be well above the floor, as they were this season.

"All of the talk at the ownership and management level is about getting better," Priest said. "We don't know what (Howson) will have to present to us this summer, as far as trades or signings he'll be able to make happen.

"But the edict is very clear from above - we want to get better. We want to compete. I don't imagine our payroll is going down."

The Blue Jackets have lost at least $80 million over the six seasons since the NHL lockout. That's the price - $80 million - that late majority owner John H. McConnell paid to buy an expansion franchise from the NHL in the late 1990s.

Forbes magazine valued the franchise at $153 million this season, ranking it 25th in the 30-team NHL.